mindtap chapter 3
It extends and guarantees credit to overseas buyers of American goods and services and guarantees short-term financing for imports.
Which of the following statements is correct regarding the Export-Import Bank of the United States?
a balance of payments includes investments, money spent by foreign tourists, and other factors
A balance of payments is different from a balance of trade in that _______.
positive balance of trade
A country that exports more than it imports is said to have a ________.
Small Business Administration U.S. Export Assistance Center
A firm looking for assistance in export marketing and trade finance would likely contact which U.S. Government Export Assistance Program?
They are organized under the laws of their home country.
BP p.l.c. is a British multinational oil and gas company headquartered in London, England. It is one of the world's seven oil and gas "supermajors." BP p.l.c. is a vertically integrated company operating in all areas of the oil and gas industry, including exploration and production, refining, distribution and marketing, power generation, and trading. It also has renewable energy interests in biofuels, wind power, smart grid, and solar technology. BP p.l.c. has operations in roughly 80 countries worldwide, and approximately 19,000 service stations worldwide. Which of the following is correct regarding BP p.l.c. and all other multinational corporations?
equalize the nation's balance of payments
Businesses in Germany have approached its government leaders and requested trade restrictions. The leaders review the nation's trade situation and elect to impose restrictions. The leaders most likely did this to _____.
Exporting
Charlotte has grown her lumber business in the United States, and she would now like to sell and ship a portion of her lumber produced in the United States to customers in Europe. Regarding her plan to sell and ship some of her lumber to European customers, Charlotte plans to engage in which of the following forms of business activity?
tariffs
Countries using ______ as a trade restriction may be trying to protect a domestic industry from competition.
social and cultural
Differences in language, religion, and values would be considered a(n) _______ challenge.
Comparative advantage
Due to its climate and a large amount of land suitable for dairy cows, Ireland can produce cheese and butter more efficiently than other products. Because of this, Ireland is said to have which of the following in cheese and butter production?
General Agreement on Tariffs and Trade (GATT)
Following World War II, an international organization involving 22 countries and the United States was formed to reduce or eliminate tariffs and other barriers to world trade. This organization is called the _____.
export-import agent
One option for exporting is to use a(n) _______, which is an independent firm that sells the products for the exporter for a commission or fee.
A tire manufacturer in Kentucky that sells its tires to a Toyota plant in South Carolina
Several businesspersons are discussing their businesses and all assert that they have international businesses. Which of the following is not considered an international business?
A Small Business Administration U.S. Export Assistance Center
Suppose you own a tractor manufacturing company that has historically sold exclusively in the United States. You plan to expand your sales to Europe, and you would like to seek input regarding the best ways to market your tractors to consumers in European countries. Which of the following organizations would be best suited to provide you with the international marketing advice you seek?
trade deficit
The United States currently has a(n) _______.
The European Union (EU)
______ is an economic community made up of 27 countries that uses a common currency to facilitate trade.
The Export-Import Bank of the United States
______ is an independent agency of the U.S. government whose function is to assist in financing the exports of American firms.
it requires less commitment from all parties than other methods of entering foreign markets
Freeport Manufacturing forms a joint venture with Cheng Merchandise, a Chinese company located in Hong Kong. Freeport Manufacturing may have entered the joint venture because it offered all of the following advantages except _____.
A multinational corporation
Headquartered in Irving, Texas, ExxonMobil is one of the world's largest publicly traded energy providers and chemical manufacturers. It operates facilities or markets products in most of the world's countries and explores for oil and natural gas on six continents. As such, ExxonMobil is best described as which of the following?
The World Bank
Hina is an undergraduate student enrolled in an International Economics course. During one class session, Hina's professor devotes a portion of her lecture to discussing the most widely known multilateral development bank (MDB), a cooperative of 189 member countries that provides loans to developing countries to help them grow. To which of the following organizations was Hina's professor referring?
Argentina has a trade deficit.
If Argentina imported $1,672 billion worth of goods and services and exported $1,238 billion of goods and services, which of the following is true?
a social and cultural barrier
If the Nederlander Producing Company wanted to take the production of Newsies to a theater in Paris, but realized that some of the song lyrics would need to be changed in order for French audiences to understand the jokes, this would be an example of ________.
import quota
If the United States limited the quantity of Mexican tequila that could be brought into the country for the next five years, this is called a(n) _____.
A trade deficit of $678.7 billion worth of goods and services
In 2020, the United States imported $2,810.6 billion worth of goods and services and exported $2,131.9 billion worth of goods and services. Based on this data, the United States had which of the following that year?
Balance of payments
In May 2021, the total flow of money into Luxembourg exceeded the total flow of money out of the country by EUR 266 million. In terms of Luxembourg, the number EUR 266 million represents which of the following?
Create an international division, Acquire a foreign company
In a direct investment, a company can do which of the following? (Select two.)
Advocacy Center
Intech Contracting, based in Lexington, KY, is competing for a job painting bridges in Ottawa, Canada. Canada's government is taking bids and Intech would like some assistance from a U.S. Government Export Assistance Program. Intech would likely seek help from _____.
the International Monetary Fund (IMF)
Jamaica is experiencing balance-of-payment deficits and is seeking financial support. Jamaica should probably seek assistance from ____.
bill of lading
Jamila's Transport issues a(n) ____ to an exporter to prove merchandise has been shipped.
Exporting
Katharina owns a business in Michigan that produces solar panels for residential and commercial use. So far, Katharina's business has only sold solar panels to customers here in the United States, but Katharina would like to expand her business to include sales to foreign customers. Which of the following is the least complicated and lowest risk method of business Katharina can choose to expand her business internationally?
direct investment
Nederlander's first expansion globally was to purchase three theaters in London, England. This strategy of entering global markets is called _______.
Dumping
Suppose that Japan produces a particular make and model of television for sale in the United States with a manufacturer's suggested retail price of $699, while customers in Tokyo and Kyoto must pay $999 for the same television. This may be evidence of which of the following?
Importing
Suppose that The TJX Companies, Inc., purchases wicker baskets produced in China and sells them to customers in its stores in the United States. Regarding the purchase of wicker baskets produced in China and bringing them into the United States for resale, The TJX Companies, Inc., is engaging in which of the following forms of business activities?
A joint venture
Suppose that to expand its gum sales to consumers in China, the Wrigley Company forms a 5-year partnership with a Chinese-based marketing firm. The Wrigley Company partners with the Chinese firm for the strategic purpose of gaining market knowledge and access in China. This business arrangement is known as which of the following?
Currency devaluation
Suppose that to increase its volume of exports to the United States, the Chinese government lowers the comparable worth of its national currency, the yuan, by 25 percent relative to the U.S. dollar. This practice is known as which of the following?
A tariff
Suppose that to reduce the number of Japanese-manufactured cars sold in the United States, the federal government elects to impose a 25-percent tax on all Japanese cars imported for sale in the United States market. This tax is known as which of the following?
The World Trade Organization (WTO)
Suppose the federal government suspects that China is illegally dumping semiconductors into the United States market and would like to have its concerns addressed by an international forum. In which of the following organizations should the United States pursue its claim?
A short-term loan to address the country's balance-of-payment deficit
Suppose the president of Nauru, a small developing nation, would like to obtain a loan from the International Monetary Fund (IMF) for his country. Which of the following requests would most likely result in a loan from the IMF to Nauru?
legal and political climate considerations
The Nederlander Producing Company has expanded to China through a strategic partnership with the China Arts and Entertainment Group (CAEG). It is hoping to open a production of Ghost, based on the movie of the same name. Nederlander has been forced to cut one song from the show due to censorship imposed by the nation's government. This is an example of ______.
The USMCA will be formally reviewed at least every three years to ensure that it remains beneficial to the United States, Mexico, and Canada.
The United States-Mexico-Canada Agreement (USMCA) updated the North American Free Trade Agreement (NAFTA) in all but which of the following ways?
Monitor national trade policies, Mediate trade disputes, Serve as a forum for trade negotiations
The World Trade Organization (WTO) aims to do which of the following? (Select three.)
European Union (EU)
The ________ has adopted a common currency, works to remove trade restrictions, permits the free flow of goods and workers throughout member nations, and promotes human rights within member countries and around the world.
International Monetary Fund (IMF)
The main purpose of the _____ is to promote exchange rate stability and assist in establishing a multilateral system of payments.
balance of payments
The total flow of money into a country minus the total flow of money out of that country over a specified period of time is the ______.
the United States, Canada, and Mexico
The trade agreement formerly known as the North American Free Trade Agreement (NAFTA) and now known as USMCA is an agreement between ________.
Embargo
When a country suspends trade of a particular product or with a particular country, they are using which type of trade restriction?
The World Bank
Which of the following banks was established in 1944 and offers low-interest and interest-free credit to developing countries?
To lower prices for consumers
Which of the following is not a frequently cited reason for restricting trade with other countries?
Subsidies to the military-industrial complex
Which of the following is not a service provided by the African Development Bank?
Goods are produced more efficiently when a country specializes in the products for which it has a comparative advantage.
Which of the following statements is correct regarding absolute and comparative advantage?
Canada and Mexico are the United States' best partners for its exports.
Which of the following statements is correct regarding the United States' economic outlook for international trade?
Export
Which option should you use to expand internationally?
Absolute advantage
With its ideal climate, Colombia grows coffee more efficiently than any other nation in the world. With regards to coffee production, Colombia is said to have which of the following?
The Advocacy Center
You own a construction company headquartered in North Carolina and you plan to compete for a large infrastructure (roads and bridges) contract with the Haitian government. Which of the following organizations would be best suited to assist you in competing for this contract?
The General Agreement on Tariffs and Trade (GATT)
Yuki is a graduate student enrolled in an International Trade Law course. To learn more about organizations that facilitate international trade, Yuki chooses as the topic of his major research paper the international organization created at the end of World War II and currently comprised, in its new form, of 164 nations dedicated to reducing or eliminating tariffs and other barriers to world trade. Which of the following is the subject of Yuki's research paper?
The World Bank
______ provides loans to developing countries to provide safe drinking water, build schools, improve health care and access to water and sanitation, and other efforts.
A multilateral development bank (MDB)
_______ is an internationally supported bank that provides loans to developing countries to help them grow.
Joint ventures
_______ is/are often a political necessity because of government restrictions on foreign ownership.
Contract manufacturing
_______ occurs when one firm employs another business—often in another country—to manufacture its products or product components to the domestic firm's specifications.
The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR)
________ includes member nations the United States, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.
The Export-Import Bank of the United States
________ is an independent agency of the U.S. government whose function is to assist in financing the exports of American firms.
bureaucratic red tape
A newly formed country in Oceania has no high tariffs but other countries find it difficult to trade with it because of its extensive labeling, product testing, and certification requirements. These restrictions can best be classified as _____.
if quality is compromised, it will reflect poorly on the company providing the license
A producer may decide not to use licensing as a means of expanding their brand because ____.
to retaliate for another nation's trade restrictions
All of the following are arguments against trade restrictions except _______.
comparative advantage in wine production
Although it lacks sources of hops and olive oil, Normandy Road Vineyards, vintner of Normandy Road Red, has a plentiful supply of cabernet sauvignon grapes for its wineries which means it has (a) ____.
a country has the ability to produce a product more efficiently than any other nation, a country has the ability to produce a product more efficiently than any other product
An absolute advantage means that ________, while a comparative advantage means that ______
direct investment
Anjali's Microscopes sells its products in educational supply and toy stores in the United States. In order to make the microscopes more inexpensively but still to Anjali's specifications, Anjali's opens a totally-owned facility overseas. This facility is an example of ____.
the Commonwealth of Independent States
Armenia, Belarus, Kazakhstan, Russia, and five other countries are part of ______, an economic community.
